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Tom Baer
307-703-4020
tom@AmericanAgVA.com

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Wendy Fischer
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May 2016

WHEN SHOULD I SELL?


As summer nears and hay season once again stares us in the face, a common question I get asked is when is the best time to sell?  Although, this is a very legitimate and basic question the answer is not as simple. Let’s take a little walk into the past and what I have seen as I watch the hay markets daily. What I have witnessed may not happen every single year but I think we can draw some good conclusions.  The hay market of course is as fickle as the blowing winds but stay with me as we attempt to make some sense of it.

When looking at the markets over the past several seasons the highest sale prices for hay have been July, August and September. I can hear the booing, but let me explain. Of course we have to keep in mind that this varies with types of hay, location, bale size, and whether or not we have a wet or dry spring. Many buyers have grass coming on heavy in the spring and aren’t too worried about or thinking of buying hay.  So by the time May rolls around, most of the ones that are buying or looking are waiting for the bright green new crop.   Those buyers aren’t as interested in last year’s squares especially if they haven’t been under shed or at least tarped. If you are a producer of round bales, there may not be as much damage as the uncovered squares but regardless of bale size buyer’s excitement still increases with new hay.    

As that new hay is coming on and we are busy marketing, there is a rush of buyer activity and a lower supply since a lot of growers tend to sell in the fall. By selling early you can cash in on the desire for new hay as well as much less competition! It seems that October and November are when a lot of folks finally start thinking about selling their hay which causes a glut to hit the market all at once. About this same time the buyer’s activity starts to slow since many do not know how harsh the winter will be or how much they are going to need to buy.  Along with that the very early buyers already have some of their inventory.  There are also several other advantages to selling early: little to no damage, you are selling green hay right out of the field which results in little to no shrink, and it’s money in your pocket to keep your operation flowing smoothly!

However, market history has also shown that if you have a high quality product of either squares or rounds and they are covered very well or in a shed, sometimes there is an advantage to selling in the late winter months. By waiting until most hay is sold you may be able to take advantage of a niche market of buyers who are looking for that premium, protected, green hay, late in the winter and early spring.  But keep this in mind- if you are not going to cover and protect your hay then without a question the earlier you sell the better! Give me a call as it’s falling out of the back of the baler and let’s get it moved.  The minute it has the first shower or snow on it you are losing serious value! I have never seen even one example of where it pays to not cover or shed your square bales but if you simply cannot tarp or shed your hay then I advise selling as fast as possible.  Here’s something to ponder, Why not get it sold immediately and let the buyer worry about protecting his investment? 

So when should I sell?  Even though I provided you my observations over the past several years we have to keep in mind this is not a one size fits all answer. I believe it would be best answered with a phone call and a good long discussion about your specific operation, location, bale size, program, and a few other details.  One of the goals of my business is to understand your unique operation and help you to improve the marketing of your hay. Don’t be afraid to pick up the phone, dial me up, kick your feet up and ask all the questions you would like. Although I won’t even claim to be able to answer them all I will provide you some suggestions to help you get results!

Tom Baer, Owner and Auctioneer